3. (1Lease) Company ABC need to use a machine for 5 years and have the following...

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3. (1Lease) Company ABC need to use a machine for 5 years and have the following two options: a. Lease it for $10,000 per year payable in the beginning of each year b. Purchase it at $40,000 right now. It is given that the marginal tax rate for this company is 35% and the CCA rate of depreciation is 30%. In this question, there are no maintenance fees nor salvage value. Compute the Lease cash flow: Save cost of the new equip Lost CCA tax shield Lease payment Lease payment tax shield Cash Flow of the lease UCC CCA (CCA rate=30%) CCA tax shield 0 1 2 3 4 5 4. (10) (Lease) Continue from the previous question, it is given that the market interest rate is 10%. Determine the net present value of the lease to the lessee. Also, suppose this machine needs $2,000 at the start of each year to maintain it and there is still no salvage value of the machine after 5 years. Calculate the new net present value of the lease to the lessee. Remember, this is a full service lease! 3. (1Lease) Company ABC need to use a machine for 5 years and have the following two options: a. Lease it for $10,000 per year payable in the beginning of each year b. Purchase it at $40,000 right now. It is given that the marginal tax rate for this company is 35% and the CCA rate of depreciation is 30%. In this question, there are no maintenance fees nor salvage value. Compute the Lease cash flow: Save cost of the new equip Lost CCA tax shield Lease payment Lease payment tax shield Cash Flow of the lease UCC CCA (CCA rate=30%) CCA tax shield 0 1 2 3 4 5 4. (10) (Lease) Continue from the previous question, it is given that the market interest rate is 10%. Determine the net present value of the lease to the lessee. Also, suppose this machine needs $2,000 at the start of each year to maintain it and there is still no salvage value of the machine after 5 years. Calculate the new net present value of the lease to the lessee. Remember, this is a full service lease!